- New Zealand inflation softer than expected during Q2: (NZ Q3 CPI QOQ: 0.5% V 0.8% expected, 1.0% prior; YOY: 1.8% V 2.1% expected, 2.0% prior) Analysts pointed out that much of the slowdown in inflation is a result of government spending on childcare and health, but core private sector prices still show a strong undercurrent of inflation. Nevertheless, the headline reading gives the RBNZ room to maneuver and prevent further rate hikes. Between 17:00 ET and 23:15 ET: NZD/USD - 0.50%, NZD/JPY -0.57%, NZD/AUD -0.41%

- Forex: The USD held steady at the start of the week as traders continue to reduce expectations of an October Fed rate cut. EUR/USD drifted lower for most of the session, but failed to test a rumored option barrier at 1.4150. Some analysts suggest that we could see some profit-taking on the carry trades ahead of the G7 meeting, and expectations of stronger than expected U.S. inflation data on 10/17 could add momentum to this trend. The NZD failed to recover after soft Q2 inflation data led to heavy selling at the start of the session. Between 17:00 ET and 23:17 ET: EUR/USD -0.08%, USD/CAD +0.17%, EUR/JPY -0.16%, AUD/JPY -0.14%, AUD/CHF -0.08%, CHF/JPY little changed, GBP/USD dropped sharply at the start of the session but managed to recover.

- Australia announces that the next election will be held on November 24: Opinion polls suggest conservative Prime Minister John Howard is heading for a thumping defeat, but the election is not expected to prevent the Reserve Bank of Australia from hiking rates if Q2 inflation data comes in stronger than expected.

- China's Premier Wu said that China is to take comprehensive measures to balance international payments, adding that they will improve the Yuan exchange rate mechanism. He said that Chinese productivity remains low and that structural problems persist. Wu also reiterated China's willingness to achieve peaceful reunification with Taiwan.

- Equities: At 23:03 ET the Nikkei is higher by +0.25%, tracking Friday's Wall Street gains. However, a sharp rise at the start of trade couldn't be sustained as investors sold chip-makers and other tech stocks. Australia's ASX once again moved to a record high in early trade, but a profit warning from AGL Energy and guidance from Commonwealth Bank limited further upside. Macquarie Bank analysts cut their ratings on BHP and Rio Tinto. Chinese equities largely ignored the reserve ratio hike by the PBoC, with the benchmark index higher by +0.33%. South Korea's benchmark Kospi index is lower as investors re-evaluated Samsung's capex plans, with profit-taking expected to be the dominating theme in Seoul over the coming week.

- Commodities: Spot gold moved higher by +0.32% between 18:00 ET and 23:13 ET, last quoted at $756.20/oz. Crude oil is lower by -0.18% (last quote at $83.54/bbl) as concerns remain over Turkey's involvement in Iraq. During a press interview at the start of the session the CEO of Gulf Oil LP called for $100/bbl oil in the next 6 months.

(by Eben Esterhuizen and Gavin Pierce)